AFA calls for amnesty on super
The Association of Financial Advisers (AFA) is calling for an amnesty on changes to superannuation tax in next month's Federal Budget in order to restore consumer confidence in the retirement system.
AFA president Michael Nowak rejected the notion that the current system was unsustainable, pointing to recent Mercer research findings that Australian tax concessions on super were not generous when compared to eight other countries, which are considered to have the best pension systems in the world.
"It's important to also remember that of the nine countries included in the research, Australia is the only country with a tax on contributions," Nowak said.
He added the call was in response to an increase in client concern following speculation around raising the tax rate on superannuation in this year's budget.
"Our members indicate that the speculation is driving high levels of anxiety amongst those of their clients who are trying to fund their own retirement and avoid the need for future government handouts," Nowak said.
"Continuing speculation over the last few months and the recent ramp-up in media speculation about the issue are seriously dangerous for the superannuation system and this anxiety is impacting people at all income levels."
While the speculation includes reducing the income level at which a higher contributions tax kicks in, Nowak said the problem was the message being sent to consumers.
"The 2012 introduction of an increase in contributions tax — an extra 15 per cent for people earning more than $300,000 — coupled with the potential further change to this threshold in 2013 begins to create a pattern of policy change," Nowak said.
"Consumers are concerned there is a very real risk the threshold will be further reduced in coming years."
The AFA called for a long-term, bipartisan approach to ensure certainty around the future of superannuation, Nowak said.
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